Mulberry issues profit warning

Mulberry warned that its full-year results would fall short of last year and be below current market expectations, following a recent downturn in demand.

Luxury brand Mulberry posted a 6% hike in pre-tax profit to £1.33 million for the six months to September 30, but current trade has dipped and the luxury goods company said the outlook has become more challenging.

Mulberry's sales for the six months to September 30 soared 29% to £27.8 million, with like-for-like sales up 5% and total UK retail sales ahead 21%.

However, for the 10 weeks to December 6, like for-like sales dived 12% with UK retail sales down 1%. Mulberry said: "The slowdown in consumer demand experienced during the last weeks of September has continued. It is clear that the economic climate is having an adverse impact on the buying behaviour of our customers."

Mulberry chairman and chief executive Godfrey Davis said: "Since September, the global economic outlook has become significantly more difficult. However we believe we are well positioned, with our strong brand and balance sheet, to weather the challenges ahead."

"Our financial performance for the year to March 31,2009 is expected to fall short of that achieved last year and below current market expectations. This is as a result of the slowdown in consumer demand and in our strategy of continuing to invest in product development and marketing internationally. We believe that this continued investment in the brand is the key to building market share and future value."

Mulberry added that Christmas trading was an important contributor to turnover and profit, as are the January Sales. The statement said: "With forecasters continuing to project a global downturn the outcome for the year will necessarily be impacted by trading in the weeks ahead."

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